Public healthcare workers who worked on the frontline during the Covid-19 pandemic are to receive a once-off €1,000 tax free payment under a plan passed by Cabinet this morning.

An additional public holiday and national commemorative event, in remembrance of people who lost their lives due to the Covid-19 pandemic, will take place.

It is understood that while the new bank holiday will be held on Friday 18 March this year, the national commemoration event is likely to be held on Sunday 20 March.

The Cabinet grappled today with who to reward for their work on the frontline during the pandemic, as well as the general public.

The bonus scheme will cost in excess of €100 million, with the Government hoping to make the payment before the end of March.

It is understood that the method of payment is still being worked out between the HSE and Department of Health, and it is hoped this can be finalised next week.

Not everyone who qualifies will secure the full €1,000 payment. Student nurses, who only worked on the frontline for part of the pandemic, will be paid on a pro-rata basis.

It is believed the same will apply to workers who retired during the pandemic.

All public healthcare staff who worked in a clinical setting, including hospital porters, cleaners and ambulance workers will be entitled to the bonus.

Student nurses who did placements in hospitals and healthcare settings, as well as army personnel who were deployed to Health Service Executive testing and vaccination centres, are also in line for the payment.

Healthcare workers who are privately employed will not be included in the scheme - with the exception of staff in private nursing homes and hospices who will get the tax-free bonus.

The Taoiseach told the Dáil that private healthcare workers who were "contracted by the HSE" and worked on the frontline are entitled to the payment.

Micheál Martin said this was his "understanding", "subject to further clarification".

The payment will not be made to healthcare employees who worked from home, and is instead being directed towards those who worked on site, in a clinical setting.

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Minister McGrath, said the Government appreciates that many workers went beyond their normal duties during the pandemic, but singling out healthcare was the most fair approach.

He added private employers - particularly in the retail sector - had provided financial recognition to their staff.

Minister Donnelly said there will be frustration felt by many workers who are not eligible.

"If this was a payment recognising hard work and dedication, a lot more people would be getting it," he said.

Tánaiste Leo Varadkar said all workers will benefit from an additional public holiday which will take place on 18 March.

The aim of the package of measures, which includes the bonus and the new public holiday, is to recognise both the efforts of the general public and Ireland's frontline workers.

Last September, Mr Varadkar told the Dáil it was his "strong view" that bonus payments, or extra leave, should not be limited to frontline workers in the health service.

Michael McGrath, Leo Varadkar, and Stephen Donnelly at a media brief following today's Cabinet meeting

Minister for Public Expenditure Michael McGrath said the Government appreciates that many of the 350,000 public servants went beyond their normal duties during the course of the pandemic.

But he said Cabinet had to decide where to draw the line and the decision to limit a €1,000 bonus to healthcare workers is one it can stand over.

"There are many different groups within the public service who can make a legitimate case that they did take on extra duties, did put themselves in some risk and we absolutely acknowledge that," he said.

"We came to the view overall that singling out healthcare was the most fair, the simplest and most effective demonstration of our support for that sector."

He said some private employers - particularly in the retail sector - had provided recognition to staff.

While not all could afford it, he said it is a matter for private employers "who wish to take a lead from what the Government is doing, to consider that".

Additional reporting Mary Regan